# Cigar Lounge, Good or bad business to get into?



## Matt Mangini (Nov 4, 2013)

Business plans, suggestions, ideas, opinions, comments?


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## AceRockefeller (Aug 11, 2013)

Depending on where you live, i wouldn't think it would be very profitable. With the internet now people can easily save 50% without even leaving their house. However if you were a b&m second and an online retailer first with an amazing online presence like CI or *************** i would think you would be much more profitable. I'd be willing to bet both of these companys make some money from b&m sales, but mountains and mountains more from e-commerce sales.


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## alfred1222 (Oct 20, 2013)

It could be very profitable, but you need to consider all of the decisions that factor into the success of a cigar shop. The location, the demographics of the area, the prices and the overhead, all of these matter into your success or failure. I buy plenty of cigars from my local cigar shop, more then i pick up from CI, simply because my cigar shop has some very good deals. But those deals dont make the shop stay open. My local lounge runs because they operate one of the few true lounges in the area; ie they are the only place where people can go to smoke indoors, drink, and watch sports, all at the same time. The store is constantly full of regulars, and they are the ones who keep the business going.


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## Matt Mangini (Nov 4, 2013)

Yea some good points there thank you! How about more of a lounge based idea, membership, plenty of TVs, wifi, god ventilation. Obviously inventory will be a big part but that would be something that develops. Creating a comfortable cigar atmosphere would be first priority. In any business it takes time I understand that but I guess what I'm trying to say is more of the " field of dreams approach" build it and they will come lol...


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## ghe-cl (Apr 9, 2005)

Since you're in Raleigh, I'd recommend visiting some shops in another city, say Charlotte. Find a place or two you like and talk to the owners. Since you're not going to compete with them they're likely to be fairly open. All retail is tough and going into a field that's got a small clientele. Just be very careful, methodical and thorough if you decide to go ahead.


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## alfred1222 (Oct 20, 2013)

Matt Mangini said:


> Yea some good points there thank you! How about more of a lounge based idea, membership, plenty of TVs, wifi, god ventilation. Obviously inventory will be a big part but that would be something that develops. Creating a comfortable cigar atmosphere would be first priority. In any business it takes time I understand that but I guess what I'm trying to say is more of the " field of dreams approach" build it and they will come lol...


I think you could make a lounge work, but it is a niche market, and location is everything. I live in california, and there are two cigar lounges back home. One is "classy", located in the shopping district, has a membership and overpriced cigars with little selection, but survives because they have a few regulars and a lot of people who just come in for a cigar or two. Their membership costs $1200 a year, with the contingency that the member must buy two full boxes of cigars over the period of that year, which brings the yearly cost to close to $1500. This membership includes a locker, where the member can keep cigars and alcohol. Another is the epitome of a lounge; huge wall to wall humidors, a selection that is unmatched by any other store around. The nice part about this store is that, for regulars, they have "lost" cigars. Box's of cigars that were stored in the huge storage humidor and forgotten about, found years later in a perfectly aged state, delicious sticks. The store owner and staff are also friendly, and they truly encourage new smokers. Lastly, membership costs $20 a month, or $240 a year, and gives members the same perks as the other, more expensive shop. This lounge makes money by having a good reputation, and attracting all sorts of smokers, who want to come back time and time again


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## brimy623 (May 25, 2013)

alfred1222 said:


> It could be very profitable, but you need to consider all of the decisions that factor into the success of a cigar shop. The location, the demographics of the area, the prices and the overhead, all of these matter into your success or failure. I buy plenty of cigars from my local cigar shop, more then i pick up from CI, simply because my cigar shop has some very good deals. But those deals dont make the shop stay open. My local lounge runs because they operate one of the few true lounges in the area; ie they are the only place where people can go to smoke indoors, drink, and watch sports, all at the same time. The store is constantly full of regulars, and they are the ones who keep the business going.


+1^^
If you have the stock, location & *ambiance*, it could be very profitable.
Not everyone wants to smoke at home alone. They use it as a time to network, whether professionally or socially, and unwind. Have a few drinks, watch sports and/or talk about whatever.


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## Matt Mangini (Nov 4, 2013)

Thank you everybody!! All great stuff to keep in mind!!


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## Nature (Jul 30, 2012)

You would need to create an environment to draw people in. I would think a cigar retailer is probably not enough; too competitive with online sales. Offer something unique. One retailer around here has a smoking area with barber chairs. Doesn't have to be that, but it is something different.

Heck, if I could go someplace and get an old fashioned shave, haircut, sit around with a cigar and shoot the bull, I'd be there.


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## dgold21 (Jul 7, 2007)

I've always wanted to do something like that here...with the idea of lounge first, retail second...create a great environment, have memberships so people can store their bottles as well as their cigars...the kind of place I'd like to frequent.


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## Joe K (Oct 30, 2013)

I was thinking of opening a lounge when I retire. I would like to have a nice cozy place that's open real late, I would like a place to stay open till 2am at least.


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## StogieNinja (Jul 29, 2009)

I'd think it would be a difficult proposition given the online prices and ability to avoid taxes, and I also think it's a risky choice of business to start now, given the pending FDA stuff and the political environment we live in.


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## Tobias Lutz (Feb 18, 2013)

dgold21 said:


> I've always wanted to do something like that here...*with the idea of lounge first*, retail second...create a great environment, have memberships so people can store their bottles as well as their cigars...the kind of place I'd like to frequent.


+1. Personally, I wouldn't even want to get into the business of selling anything but memberships. I would find an ideal spot, retrofit it for humidor lockers, make the place BYOB. I think location is your first concern, then it's all about the details. How comfortable are the chairs...what kind of perodicals are on the tables...what are the rules about bringing a guest from time to time...etc.


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## MDSPHOTO (Sep 10, 2013)

I've toyed with the idea of opening a cigar bar/lounge and I'll keep the concept to myself, but as others have said until the FDA acts, its probably not a great idea.


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## brimy623 (May 25, 2013)

Tobias Lutz said:


> +1. Personally, I wouldn't even want to get into the business of selling anything but memberships. I would find an ideal spot, retrofit it for humidor lockers, make the place BYOB. I think location is your first concern, then it's all about the details. How comfortable are the chairs...what kind of perodicals are on the tables...what are the rules about bringing a guest from time to time...etc.


Unfortunately you have to think of some sort of retail or membership otherwise You wouldn't be able to pay the rent!



MDSPHOTO said:


> I've toyed with the idea of opening a cigar bar/lounge and I'll keep the concept to myself, but as others have said until the FDA acts, its probably not a great idea.


Share the idea!! Maybe we could franchise.

I like & agree with @Nature about the barber shop/lounge!

And I think everyone agrees that the lounge aspect and the experience has to be the most attractive part of the whole endeavor! If you did also carry smokes and other merchandise and/or serve food/beverages it would be basically an added attraction.
My :2


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## Tobias Lutz (Feb 18, 2013)

brimy623 said:


> Unfortunately you have to think of some sort of retail or membership otherwise You wouldn't be able to pay the rent!


I believe it would depend on the location, the number of memberships you can garner, and the amount you charge. Obviously you're going to need some capital to float the thing for a couple months, but there have got to be some lounges out there that don't do retail.


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## huynha (Feb 6, 2013)

A cigar lounge/B&M just opened last week in my area (suburbs of Philly). Talking to the owner, of of their strategies was to market themselves as a nice place to relax for an 1-2 hours while you miss rush hour. There are at least 3 major roads out of the King of Prussia area that are ALWAYS packed. I think and hope they will do well.


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## brimy623 (May 25, 2013)

Tobias Lutz said:


> I believe it would depend on the location, the number of memberships you can garner, and the amount you charge. Obviously you're going to need some capital to float the thing for a couple months, but there have got to be some lounges out there that don't do retail.


All of the lounges that I've been to here in NYC (all 3 of them ) have retail of smokes and accessories.
Other than membership and/or lockers, I see no other way. Maybe I'm being a little short sighted, but I don't see it.
You have to do something to generate revenue.


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## ghe-cl (Apr 9, 2005)

What many of you seem to describing seems much better suited to a private club, such as the Metropolitan Society http://www.metrocigar.com/index.htm in New Jersey than to a retail business. As a nonprofit, it can be made to work. As a commercial venture, I cannot conceive of being successful selling only memberships.


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## dmanuel (Aug 17, 2013)

I've been considering a small place with lockers, membership, live music, lounge seating, bar, retail, and billiards. Billiards, bar, and live music would be on one side with lockers, retail, and lounge on the other. My area is about 350k people and the closest lounge is about 1.5 hours away in a 50k person town. They stay busy selling cigars, pipes, hookahs, and ecig's.


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## brimy623 (May 25, 2013)

dmanuel said:


> I've been considering a small place with lockers, membership, live music, lounge seating, bar, retail, and billiards. Billiards, bar, and live music would be on one side with lockers, retail, and lounge on the other. My area is about 350k people and the closest lounge is about 1.5 hours away in a 50k person town. They stay busy selling cigars, pipes, hookahs, and ecig's.


*This* setup would be dependent of location.
My initial thoughts of opening a lounge is tying it into a bar/restaurant also! But here in NYC the "laws" are extremely restrictive.
But this would probably be the ideal setup! IMO


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## JustinThyme (Jun 17, 2013)

Leaving the B&M out of it and just going on the lounge prospect I would never do it. Firstly you have to turn a profit and that's going to be very difficult to do.

Rule 1 for this is you have to have a base of prospective clientele that will pay for a membership. This in and of itself makes it a rough go. Its a hard pressed idea to find folks that will be willing to pay a premium just go go and smoke cigars and hang out when they can do that at home. To get them interested it will take incentives, incentives cost money and the more attractive you make it the higher you drive up the membership cost to make it less attractive. There is only one in my area that sounds like it would be a nice place to go. Has everything needed, personal lockers in a large walk in humidor, leather furniture everywhere, several big screens, a bar that you buy your own drinks and they order up snack type food like pizza and wings every night that's on the house. Now where my problem comes in..... The membership is $1800/year!


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## Old Smokey (Sep 13, 2013)

Sounds like it would require a pretty good financial outlay to just get it started and could take a while to build up the membership to be profitable. I would first find out what the laws and requirements in your state and city. You would really need to do your homework.


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## A.McSmoke (Jan 9, 2013)

It could work, but you've got to do tons of market research for your area. You're definitely in a friendly tobacco tax state in comparison. Here are things I've seen in a combination of places thrive here in NC:

1.They have memberships, but it's not required. Membership only gives you access to the private lounge & a personal locker, but all are welcomed to enjoy the main lounge area.
2. One place has a club vs: a traditional membership, and it's only $50 a year. The club meets once a month for game nights, sporting events, etc, you get occasional sticks during club events and I believe 5% off purchases.
3. Get a liquor license if you can, or at least a beer/wine permit. Nothing like pairing your cigar with a beverage. Just selling cigars prob won't cover operational cost.
If not, partner up with bar/rest where you can have cigar related events. Your clients pay you $xy, get 2 cigars, and you pack a bar/rest that usually is half full on this weeknight, and workout a % split of the bar revenue.
4.Places are selling as many tobacco related accessories without crossing into "headshop" status. But hey, if you gotta sell grinders & bongs to keep the doors open...so be it
5. Most important in regards to location, check brand distribution. Some have exclusive deals and will not distribute with a _xy_ square miles of a place they're already doing business with. It's tough, but you know people will always buy the top brands, and if you don't have them you may be stuck with a walk-in full of products that'll be hard to sell.

Any business, especially on items considered to be luxury will be risky. You just have to stay on top of the game, make transitions and figure out how to operate in the red. You won't sleep for 2 years, and will prob be a 1 man wrecking crew during this time.

No risk, No reward!!! Good luck!


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## Tobias Lutz (Feb 18, 2013)

Tobias Lutz said:


> +1. Personally, I wouldn't even want to get into the business of selling anything *but memberships.* I would find an ideal spot, retrofit it for humidor lockers, make the place BYOB. I think location is your first concern, then it's all about the details. How comfortable are the chairs...what kind of perodicals are on the tables...what are the rules about bringing a guest from time to time...etc.





Tobias Lutz said:


> I believe it would depend on the location, *the number of memberships you can garner*, and the amount you charge. Obviously you're going to need some capital to float the thing for a couple months, but there have got to be some lounges out there that don't do retail.





brimy623 said:


> All of the lounges that I've been to here in NYC (all 3 of them ) have retail of smokes and accessories.
> Other than membership and/or lockers, I see no other way. Maybe I'm being a little short sighted, but I don't see it.
> You have to do something to generate revenue.


I think you might have just misunderstood me. I am 100% for selling memberships- just not cigars.


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## brimy623 (May 25, 2013)

@Tobias Lutz
GOTCHA!!! Must have been a little :dizzy: from that Tat I was puffing on! :lol:


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## alfred1222 (Oct 20, 2013)

dmanuel said:


> I've been considering a small place with lockers, membership, live music, lounge seating, bar, retail, and billiards. Billiards, bar, and live music would be on one side with lockers, retail, and lounge on the other. My area is about 350k people and the closest lounge is about 1.5 hours away in a 50k person town. They stay busy selling cigars, pipes, hookahs, and ecig's.


This could actually work out well for you, depending on the demographics of the area and location


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## sacamano (Jun 16, 2013)

It sounds like you are in the right geographic market. You'd need to set up shop in a part of town that is fairly affluent with some regular foot traffic, ideally, depending on if you'd just go for the cigar/pipe crowd, or if you'd dabble into hookas and some lower rung stuff. If you want to do a lounge with lockers, I'd guess you're shooting for a typical customer who has some decent disposable income and would prefer to go to a nicer part of town to shop. 

I'm curious what the markup is on, say, your middle of the road hand made cigar...CAO, Oliva, Alec Bradley, etc.? How much is to be made on those that sell most frequently? Any insight there? 

I do wonder sometimes how my local shops can compete with online retailers given the price differences. I wish you luck and keep us posted!


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## JohnRogers (Oct 7, 2008)

McSmoke gets it. Although I could still use a mentor from my state to get some figures in my business plan right.


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## Milhouse (Oct 22, 2011)

I can't see it being a cash cow. To attract customers, you need to pour money into a lounge, couches, tv's etc, all while keeping the price of your stick in line with the shop that does not offer any of these nice perks. I find I buy most substantial purchases online, or a regular smoke shop. The lounges over here charge a premium for the experience. Which is fine for singles etc... But why would anyone pay an extra $20-30 on a box?


Never mind the pressure from the government etc.... but what do I know


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## esquire47 (Feb 11, 2014)

See what your relevant local People's Socialist Dictator will allow and work backwards from there


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## JohnRogers (Oct 7, 2008)

Milhouse said:


> I can't see it being a cash cow. To attract customers, you need to pour money into a lounge, couches, tv's etc, all while keeping the price of your stick in line with the shop that does not offer any of these nice perks...The lounges over here charge a premium for the experience...fine for singles etc...why would anyone pay an extra $20-30 on a box?


I'm definitely not looking to do this as a hobby or just a place to hang out with friends, the cigar lounge will be my post military career. Money and effort will go into the lounge, Cigars, Jazz and Blues, a classy place to relax away from the weather elements. I expect people to pay a premium per stick to hang out there but I also expect most cash flow from booze sales. I'm not expecting to sell boxes, I'll leave that to CI and Thompsons, etc.


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## demuths1770 (Jan 2, 2014)

demographics would be the biggest factor. if you have a large population of cigar smokers and a limit of shops it could work. biggest this with a lounge is the time like now. yeah i can save money buying cigars online right now but im not a fan of freezing my bottom of to save them. i would rather go to a B&M right now and make a purchase and smoke it there in a warm place with other people who enjoy the hobby. plus at a B&M you have a chance to me the makers if you can host events and meet and greets. i know Lancaster pa has 2 B&Ms with lounges and they usually bring a good crowd


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## demuths1770 (Jan 2, 2014)

JohnRogers said:


> I'm definitely not looking to do this as a hobby or just a place to hang out with friends, the cigar lounge will be my post military career. Money and effort will go into the lounge, Cigars, Jazz and Blues, a classy place to relax away from the weather elements. I expect people to pay a premium per stick to hang out there but I also expect most cash flow from booze sales. I'm not expecting to sell boxes, I'll leave that to CI and Thompsons, etc.


thats a good way to look at it and i think a place that has something other than a cigar store backing would do good. sell single sticks and its the entrance fee to the lounge and than have drinks food and live bands that is where the money will come from


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## kozzman555 (Sep 10, 2011)

I'm too lazy to read all of this, so I'm just going to give you some words of wisdom I received from one the owner of the one of the US's largest B&M's in North Carolina. One of the things he said is that for a cigar store to make the bare minimum profit needed to stay in business, you need 80,000 people per store. So if your city has 100,000, it is not going to support 2 roughly equal cigar lounges like they need to be. One of them will downsize or go out of business. It's simply a numbers game.

You'll need to have a financial plan setup. What's your projected revenue, how much will you spend on advertising, what lines are you going to carry, do you know any of the regional cigar reps, what location, what kind of lounge is it going to be, can you get a liquor license and sell alcohol, etc etc. There is a lot you need to no shiat have planned out before moving forward. As other's have said, with the online purchasing of cigars being what it is, you will have to FIGHT for your customers dollars. Having a place they truly enjoy coming to, carrying a nice selection and encouraging great people to become regulars is really the best way to do it. 

Another thing most people, including cigar owners don't know is that the store owner, unless he moves a metric frackton of inventory really has little say in what or how much he can get from the manufacturer. If you wanted to buy some AF SSM's, you have to move a minimum number of cigars before they will even consider selling to you. If you want to TRY to get Liga Privada's, you have to carry the Acid line, the more the better. If you want to sell Opus X's, you bettter be REAL tight with your regional AF guy. He'll have to give you a hell of a recommendation for you to get them. 

Basically I'm saying it's not as simple as opening a store, ordering some sticks and waiting for the moola to flow in. Lot's of things to think about.


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## Old Stogies Cigars (Mar 4, 2012)

Nature said:


> You would need to create an environment to draw people in. I would think a cigar retailer is probably not enough; too competitive with online sales. Offer something unique. One retailer around here has a smoking area with barber chairs. Doesn't have to be that, but it is something different.
> 
> Heck, if I could go someplace and get an old fashioned shave, haircut, sit around with a cigar and shoot the bull, I'd be there.


I am an "old fashion" barber with a small cigar shop in the back portion of my space. I am currently working on moving into a building I bought a few months ago. It will have a smoking lounge that will be accessed through a door in my barber shop. I am keeping it separate as I have many customers who are non smokers.
My concept will be a "village courtyard" with a street light in the center, and on all walls will be fake storefronts made with recycled wood, doors, and windows that my customers and friends have let me have.... i.e. a mercantile store, a tobacco barn, a bank tellers window for the register, a boarding house, etc...
My state however is very strict on smoking and drinking, so the BYOB is the ONLY way anyone can enjoy a drink.
As some have mentioned, taxes and local/state laws vary, so DO YOUR HOMEWORK.
My goal is to at some point close the barber shop portion as it is getting hard on my legs to stand all day, and migrate to cigar shop/lounge only.

This forum has been very helpful to me in many of my choices and the way my shop is now, and what the new one will look like. I am not rich, so for me, comfort is key to my shop and fits with the working class customers of my town. A nice oak and brass type shop would be out of place here and be a bit "stuffy" for my customers.
We're just everyday normal people, not suit n tie types.

Best of luck with your venture.


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## Gdaddy (Sep 20, 2012)

61350 said:


> I am an "old fashion" barber with a small cigar shop in the back portion of my space. I am currently working on moving into a building I bought a few months ago. It will have a smoking lounge that will be accessed through a door in my barber shop. I am keeping it separate as I have many customers who are non smokers.
> My concept will be a "village courtyard" with a street light in the center, and on all walls will be fake storefronts made with recycled wood, doors, and windows that my customers and friends have let me have.... i.e. a mercantile store, a tobacco barn, a bank tellers window for the register, a boarding house, etc...
> My state however is very strict on smoking and drinking, so the BYOB is the ONLY way anyone can enjoy a drink.
> As some have mentioned, taxes and local/state laws vary, so DO YOUR HOMEWORK.
> ...


The concept of your cigar area sounds fantastic. Something with a rustic theme filled with nostalgia is right down my alley. I wish I lived closer. I grow tired of all the prefabricated, look nice types of franchise looks.

Best of luck...I think it will catch on quick.


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## Nature (Jul 30, 2012)

61350 said:


> I am an "old fashion" barber with a small cigar shop in the back portion of my space. I am currently working on moving into a building I bought a few months ago. It will have a smoking lounge that will be accessed through a door in my barber shop. I am keeping it separate as I have many customers who are non smokers.
> My concept will be a "village courtyard" with a street light in the center, and on all walls will be fake storefronts made with recycled wood, doors, and windows that my customers and friends have let me have.... i.e. a mercantile store, a tobacco barn, a bank tellers window for the register, a boarding house, etc...
> My state however is very strict on smoking and drinking, so the BYOB is the ONLY way anyone can enjoy a drink.
> As some have mentioned, taxes and local/state laws vary, so DO YOUR HOMEWORK.
> ...


Now this sounds like my kind of place! Seems down home and comfortable, like I remember the small town establishments. If this was around here, I would certainly seek this as out as a hang out. Just got to get people to spend their money so you can make it work. Best wishes. I hope this takes off.


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## Bruck (Jan 8, 2013)

Nature said:


> You would need to create an environment to draw people in. I would think a cigar retailer is probably not enough; too competitive with online sales. Offer something unique. One retailer around here has a smoking area with barber chairs. Doesn't have to be that, but it is something different.
> 
> Heck, if I could go someplace and get an old fashioned shave, haircut, sit around with a cigar and shoot the bull, I'd be there.


Check out this place Modern Male Barbershop Take Over - Cigar.com Show - YouTube


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## rh32 (Jan 19, 2014)

Bruck said:


> Check out this place


I don't have enough posts to reply with that link, but a barbershop where you can smoke a cigar and have a beer is a long overdue concept. Every town should have one of these.


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## MDSPHOTO (Sep 10, 2013)

Yesterday Barry Stein from Miami Cigar was on the CO live broadcast and this question came up. Barry previously owned a shop in Brooklyn. His suggestion was go big or go home or have another source of income in addition to the store. His experience in meeting shop owners around the country suggests you open a chain of shops if you really want to make a decent living of have it as a secondary business.


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## Nature (Jul 30, 2012)

Bruck said:


> Check out this place Modern Male Barbershop Take Over - Cigar.com Show - YouTube


That is cool! If there was a place like that around here, I'd be one of the best groomed men around. I would be in every time it was "Cigar day" instead if every 10-12 weeks as it is now (hey, I don't have that much hair left anymore. LOL)
Thanks for sharing.


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## Old Stogies Cigars (Mar 4, 2012)

Thanks for the video link Bruck!!! I like that idea, and I am "retiring" my antique chair that was my fathers over 60 years ago, and going with a new "old style" type in my barber shop. The old one was already going to be in the cigar lounge (along with another one I am getting from a retiring barber in town) that I thought guys would enjoy sitting in and smoking.
Now I am thinking on a night or two I could close the "real barber shop" up front, and take my clippers to the lounge and cut hair and let my guys smoke ( me too LOL) and have a brew or two, listen to some jazz music.
I appreciated this link, and I also appreciate the other comments.


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